Tuesday, April 6th, 2010
The importance of global diversification is often discussed as important as an investor in today’s global economy, and with the MSCI World Index and EAFE (Europe, Australasia and Far East) Index both up about 27% in U.S. dollar terms in 2009, that message remains important. However, over the past few years, we’ve been reminded of the great investment opportunities in Canada.
More Than Just Resources
Canada has not gone unnoticed by investors abroad. A report last week indicated that Canada has benefited from record net inflows of foreign investment in Canadian securities.
By extension, demand for the loonie has also increased, and this is one of the reasons why the Canadian dollar currently sits near parity with its U.S. counterpart.
Foreign investors purchased $109 billion worth of Canadian securities in 2009, and another $11.8 billion in the first month of 2010. They were particularly keen on Canadian corporate bonds in 2009, purchasing nearly 80% of net new corporate issues. Meanwhile, Canadian investors were noticeably more conservative – nearly all bonds issued or backed by the Government of Canada stayed in Canada.
Why Canada?
There are good reasons for this renewed interest in Canadian investments. Canada has a highly educated workforce, a rock-solid financial system, and one of the strongest economies in the developed world. What’s more, the Canadian stock market has delivered some of the best returns in the world over the past 10 years. (Could this be a warning sign though?)
All of these points underscore the importance of having Canadian exposure as a core holding in a well diversified portfolio.
Posted in Investor Education | 1 Comment »
Friday, October 23rd, 2009
The following is a case presented to support why we should continue to see an upward investment trend in commodities and how this positive long-term trend is due largely to the supply and demand imbalances that persist in industries that produce commodities.
In addition, the market turmoil of the past two years caused new financings of commodity exploration and development projects to become next to non-existent, so these imbalances have been exacerbated.
Ultimately, the message is the supply / demand imbalance has created a recipe for longer-term commodity price strength. It appears all the ingredients are in place for this longer-term secular theme to play out.
Using oil as an example, here are some points to consider:
- If China and India per capita consumption grows to levels similar to Mexico’s current consumption, global demand would increase by over 36 million barrels per day. This would require the equivalent of three more Saudi Arabia’s to meet this demand.
- Future oil demand will come from developing countries. For example looking at global energy demand from 2005 through 2030, it is projected that OECD (Organisation for Economic Co-operation and Development) countries will show a 19% increase while Non-OECD countries will show an 85% increase.
- Supply constraints support ‘higher for longer’ prices in oil.
- Oil reserve decline rates are getting higher, and the costs of getting oil out of the ground are increasing (the oil sands being a good example of this).
- Even if large-scale investment resumed immediately there is a time lag before commodities can get to market, so this makes it very likely that we will see most commodity prices go higher in time.
An argument against commodities in the long-run requires a belief that the U.S. economy will implode, China and India will not grow, and the wealth effect caused by the growing middle classes in developing economies around the world will not occur.
In my humble opinion, it would be a large stretch to see all of the aforementioned scenarios not play out.
Posted in Investor Education | 3 Comments »
Saturday, June 14th, 2008
Saving Money On Groceries
My wife and I made our weekly trip to the grocery store last evening. We normally shop for groceries on Sunday evening, but this week was different.
It is important to take advantage of sales on items that we purchase on a consistent basis, especially those that do not spoil. The Simple Dollar has a nice coupon strategy for this type of shopping that can often allow you to get items for free by using multiple coupons on a sale item.
No Tax!
Yesterday evening from 5:00-9:00 PM our local grocery store was having a no-tax sale. This even happens maybe a couple of times per year and we always make sure to take advantage of it.
Our grocery store also has a gas program whereby each gas purchase gives you $0.05/liter in store coupons. We have been saving these coupons for the last couple of months in anticipation of the no-tax sale.
When we heard that the no-tax sale was coming up, we made sure to add up our gas purchase coupons and search for additional coupons on staple food items during the month prior to the sale. (See coupons.com etc.)
With the arrival of our new baby, we have been intensely developing a price list at several stores for essential items such as diapers, baby wipes and baby clothing. We buy most of our baby clothing used from a local classifieds site or garage sales, but diapers and wipes are constantly on our watch list and my wife is always getting diaper coupons in the mail!
The Perfect Savings Storm!
With crippling gas prices hitting the nation, even my household with our two gas-sipping Honda’s is starting to feel the pain!
Enter the best coupon we’ve had to date!
We just received a coupon in the mail last week that offers double the cash back on one fill per month from our grocery store gas bar. Sweet! That means instead of $0.05 per liter of gas, we will get $0.10/liter for one fill only.
Knowing that the no-tax sale was coming up, drove both of our vehicles until they were bone-dry and proceeded to use the double savings coupon.
I know what you are thinking- “I thought you said it was only good for one fill”?
The coupon actually states that it is good for one gas “purchase”. So, without hesitation I filled both vehicles from the same pump so that it read one transaction of ~88 liters, or $8.80 of store credit.
I view gas purchases as somewhat of a necessity, so the additional $4.40 in grocery store credit was certainly worth it to me.
Adding Up The Savings
When all was said and done, our grocery bill shrunk substantially from $86.48 all the way down to $53.11.
A savings of $33.37 just by using some simple planning and being aware enough to combine a few savings strategies into one shopping trip.
One of the many complaints that I hear about people who don’t use coupons is that it takes too much time in comparison to the savings that can be had. While I did not count the minutes that it took to decide on the choices to make in order to make this shopping trip, I highly doubt it exceeded $33.37 worth of my time.
Do you have any favorite money saving tips or tricks? If so, please leave them in the comments…I’m always up for saving a few bucks!
Posted in Saving Money | 1 Comment »
